The firm’s “analyst rating” is forward-looking. On an annual basis, analysts review and, if necessary, re-rate the funds on a five-tier scale with three positive ratings of Gold, Silver and Bronze, a Neutral rating and a Negative rating.
Fund: Capital Group Global Allocation
Status: Coverage initiated
We have initiated coverage of Capital Group Global Allocation with a Morningstar Analyst Rating of Gold. The fund uses a multi-manager approach. It may hold between 45% and 75% in equities in four balanced sleeves and two fixed-income sleeves. Apart from its seasoned management team, which impresses with its long-term investment experience and tenure at Capital Group, we have a positive view on the ample underlying research resources, the solid investment process that places emphasis on bottom-up security selection, and the firm’s excellent stewardship. Below-average fees are an additional positive, which should give this fund a sustainable competitive advantage over its peers in the USD moderate-allocation Morningstar Category.
Fund: Invesco Euro Corporate Bond
Invesco Euro Corporate Bond strategy is co-managed by experienced portfolio managers Julien Eberhardt and Paul Read utilising a benchmark-agnostic approach. There are no formal limits other than a 30% cap on high-yield debt, government bonds, and cash altogether. The managers’ macroeconomic outlook guides the portfolio’s positioning, though they are also pragmatic in identifying opportunities outside of the central top-down scenario. The strategy has positive aspects based on the team and its strengths in security selection and sector allocation but it has become less distinctive than that of other strategies managed by the team, given the recent more benchmark-aware duration positioning. This, alongside fees that are at the higher end of the peer group, have contributed to move its Morningstar Analyst Rating to Bronze from Silver.
Fund: JP Morgan Thailand
Lead manager Isaac Thong, who has managed since 2 February 2017, will be stepping down at the end of September 2019 to relocate to the Emerging Markets and Asia Pacific Income team in London. Co-manager Chate Benchavitvilai, who has been involved in the management of the strategy since 29 May 2018, will take over as lead manager on 1 October 2019.
Desmond Loh–who had a stint as co-manager on this strategy from February 2017 through to May 2018–is re-joining as backup manager and will support the strategy with team head Pauline Ng.
While Thong’s departure is less than optimal, we take confidence that co-manager Ng is well regarded by us. She is head of Asean equity and manages the JPMorgan Asean strategy, which has a Morningstar Analyst Rating of Silver. She will continue to be a key presence and be closely involved in the decision-making on this strategy. Furthermore, there is ample continuity from co-managers Benchavitvilai and Loh. We will schedule a meeting with Benchavitvilai in July 2019 to conduct a more comprehensive update. In the meantime, we maintain the Morningstar Analyst Rating at Bronze.